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The US Services PMI fell for the second consecutive month. Fed Chair Jerome Powell predicted greater inflation, signalling rate hikes would continue. These comments eliminate a 50bps rise. The US$ strengthened while US equities sank.
Last week, the USD index (USDX) registered its second weekly rise and tested a 5-week high as The Fed Chairman reaffirmed the need for continuing with the rate hikes to get inflation under control.
(All data taken from MT4 VT Markets)
Image source: forexfactory.com
This week’s primary focus is the Non-farm Employment Change in the labour data following the Fed’s speech at the 2022 Jackson Hole Symposium on 25-27 August.
The US will release JOLTS Job Openings, Consumer Confidence, and ISM Manufacturing PMI data this week.
Germany and Switzerland will also release Prelim m/m CPI and m/m CPI data, respectively.
The German Consumer Price Index rose 0.90% in July of 2022 over the previous month.
Analysts forecast an increase of 0.3% for the Prelim CPI in Germany.
The US CB Consumer Confidence index declined to 95.7 in July 2022 from 98.4.
Consumer Confidence in the US may increase back to 98, which means that US consumers feel strongly about the stability of their income, which may influence their spending and saving habits.
The number of US job openings fell to 10.7 million in June 2022, the lowest in nine months.
We can expect that job openings in the US will be higher with more favourable conditions.
Private businesses in the US hired 128,000 workers in May, the least since the job losses in 2020.
Analysts expect the ADP Non-Farm Employment Change to rise by 200,000 for June.
The Consumer Price Index in Switzerland has not changed (0%) in July of 2022 over the previous month.
Analysts expect the Consumer Price Index in August to go lower, moving into negative territory by 0.1%.
The ISM Manufacturing PMI edged lower to 52.8 in July 2022 from 53 in June.
For August, we can expect the ISM Manufacturing PMI to be lower at 52.
Average hourly earnings in the US increased by 0.5% in July of 2022. The US economy added 528,000 jobs, and the unemployment rate decreased to 3.5%, the lowest since February 2020.
This month’s average hourly earnings are forecast to rise by 0.3%, with 300,000 additional jobs and an unemployment rate to remain at 3.5%.
Last week, the USD index (USDX) the US dollar index registered its second weekly rise and tested a 5-week high as the US Fed Chairman reaffirmed the need for continuing with the rate hikes to get inflation under control. The price jumped, reaching our Resistance Level (109.22).
In the weekly timeframe, we can see that Stochastic Indicators are increasing and entering the overbought level. This will indicate that the power movement is still on the upside. Meanwhile, the price rises above 20-, 50-, and 200-candle Moving Averages, indicating a continued higher movement.
Our Weekly Resistance Levels are at 109.22 and 111.42, with the Support Levels at 106.71 and 105.64.
Meanwhile, in the H4 timeframe, we can see that Stochastic Indicator is still increasing after trying to move lower in the past few days. The price moves above the 20-, 50-, and 200-candle Moving Average, showing that some consolidation might happen before a lower movement in the short term.
Our H4 Resistance Levels are at 109.18, with the support levels at 108.07 and 107.52.
Last week, gold prices slowed down a little due to the stronger US Dollar, reaching our support level at $1,734. Potential movement this week is still between our Support and Resistance Levels which haven’t been broken.
In the weekly timeframe, we can see that the Stochastic Indicators show a lower movement, indicating that Gold is moving lower. Gold prices move above the 200-candle Moving Average but below 20- and 50-candle Moving Averages, showing that price moves in a consolidation price, yet it can still potentially go lower.
Our Weekly Resistance levels at $1,762, and $1,787 with the support levels at $1,734, and $1,697.
In the H4 timeframe, we can see that the Stochastic Indicators are showing an oversold movement yet unable to cross higher. Price is below the 20-, 50-, and 200-candle Moving Average, which indicates that the price may still move lower.
Our H4 Resistance levels at $1,753 and $1,760, with the support levels at $1,733 and $1,716.
Last week, US stocks fell after the market worried about the inflation condition and the potential for another rate hike from the Fed.
In the weekly timeframe, we can see that Stochastic Indicators are moving lower. With the price moving below the 20- and 50-candle moving average, we still expect the lower movement to reach our support level at 11849.
Our Weekly Resistance levels are at 13349 and 13895, with the Support Levels at 12427 and 11849.
In our H4 timeframe, we can see that our Stochastic Indicators are inside the oversold level with the potential for a reversal movement. Meanwhile, the price is now moving below the 20-, 50-, and 200-candle Moving Averages showing that potential lower movements are still intact. However, we need to be cautious of the short-term higher movement.
Our H4 Resistance Levels are at 12836 and 13148, while the Support Levels are at 12434 and 12093.
Last week, US stocks fell after the market worried about the inflation condition and the potential of another hike rate from the fed.
In the weekly timeframe, we can see that Stochastic Indicators are moving lower from the overbought level. With the price moving back below the 20- and 50-candle Moving Average and above the 200-candle Moving Average, we can expect that price has the potential to move lower.
Our Weekly Resistance Levels are at 33198 and 33932, with the Support Levels at 31274 and 30619.
In our H4 timeframe, we can see that our Stochastic Indicators are moving back to the oversold level while prices are below the 20-, 50-, and 200-candle Moving Average. We can expect that the DJ30 might go higher in the short term before going back lower in the longer term.
Our H4 Resistance Levels are at 32767 and 33086, while the Support Levels are at 31962 and 31798.
